Of Bankruptcies and Turkeys

Looking back in my legislative rearview mirror, it’s amazing to think about issues facing the 2013 legislative session that weren’t even imagined in 2003. Facebook and social media protection for workers, for example, or protecting human placentas from overzealous right wingnut hospital administrators, or drones. Ah, did I mention a collapse of the housing market? This 77th edition of Salem’s Hot Air Society will have to consider another daunting problem: local government bankruptcies in Oregon.

We’ve all seen the Orange County and Stockton, Calif., bankruptcy proceedings from a distance, and more recently Detroit, Mich. Other states have recognized the need to monitor the financial condition of local governments and, on occasion, intervene. The objective of state intervention can either be preventive, to avert a financial crises; reactive, to mitigate damages and service disruptions; or a combination of these. Preventive intervention can include technical assistance grants or loans, whereas reactive intervention could involve state takeover of the local government. States with these powers generally have laws or other programs in place, enabling them to intercede when a crisis occurs or if indicators identify potential problems.

For example, Kentucky law allows the state to force local governments to take action, such as ordering them to raise taxes or reduce expenditures. If they don’t comply, the state can take legal action or take over county operations. Recently, after Kentucky detected that one of its counties was heading for fiscal crisis, it ordered the county commission to raise taxes and reduce expenditures. After the commission refused to follow the directive, a state circuit court ordered the commissioners jailed for contempt. Upon release, the commissioners apparently took swift corrective action; probably the bad jail food helped.

Michigan recently passed a law that empowers the state treasurer to place governments determined to be in the greatest distress, like Detroit, in receivership overseen by an emergency manager who has authority to do whatever is legally necessary to restore the financial health of the local government.

This week three of Oregon’s O&C counties voted on public safety levies to keep their jails operating and maintain at least a minimal sheriff’s patrol. Patrol forces are bare bones; jail inmates are routinely freed because there’s not enough staff; prosecutors don’t have enough resources to charge misdemeanor cases and officers are in danger because they can’t count on backup. O&C counties face the loss of a federal subsidy, which expired, and local taxpayers have refused to make up the gap. There is a legislative task force chaired by House Majority Leader Val Hoyle and Minority “Pope” Bruce Hanna, but their proposals range widely. There are several bills that would allow the state to create its own safety net for the rural timber counties. One bill would have the state take over such county functions as elections, building code enforcement and taxation. The most controversial would allow the governor to declare a state of emergency, then impose a local tax to pay for public safety. No one really knows how it will look right now, but most are assuming a worst-case scenario in which counties cannot provide basic services. Stay tuned.

Switching from the sublime to the ridiculous; last week I was one of three judges to vote on the 2013 Golden Gobbler Awards, given biennially to the five worst bills introduced each session. I’ve been invited to do this for 10 years now, along with two of the funniest people in Salem (despite the fact they’re lobbyists), Marla Rae and John Chandler. The event is hosted by another longtime lobbyist, Mark Nelson. The intention of the party is one night of bipartisan abuse, to be distinguished from the partisan abuse endured daily since January. Legislators, their spouses and staff, lobbyists and longtime state legislative workers: a cool gathering.

This year, four runner-ups each received a frozen rock Cornish game hen:

HB 2559: “Automatically terminates obligation to pay spousal support upon death of either party.” It’s needed, OK?

HB 2613: Authorizes Oregon Racing Commission to allow bets on races previously held. Really? What if you have a photographic memory?

About the Author

Tony Corcoran is currently a state employee, but his observations in this column are those of a private Oregon citizen. While he served in the state Senate he wrote a column for EW called Insider Baseball.